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A new, short paper by Jay B. Barney, Nicolai J. Foss, and myself overviews the emerging field of “Strategic Entrepreneurship.” It’s forthcoming as a chapter in the Encyclopedia of Management Theory, edited by Eric Kessler and published by Sage. Here’s the abstract:

Strategic entrepreneurship is a newly recognized field that draws, not surprisingly, from the fields of strategic management and entrepreneurship. The field emerged officially with the 2001 special issue of the Strategic Management Journal on “strategic entrepreneurship”; the first dedicated periodical, the Strategic Entrepreneurship Journal, appeared in 2007. Strategic entrepreneurship is built around two core ideas. (1) Strategy formulation and execution involves attributes that are fundamentally entrepreneurial, such as alertness, creativity, and judgment, and entrepreneurs try to create and capture value through resource acquisition and competitive positioning. (2) Opportunity-seeking and advantage-seeking—the former the central subject of the entrepreneurship field, the latter the central subject of the strategic management field—are processes that should be considered jointly. This entry explains the specific links between strategy and entrepreneurship, reviews the emergence and development of the strategic entrepreneurship field, and discusses key implications and applications.

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In his writings on entrepreneurship ludwig von Mises distinguished the pure entrepreneurial function of judgmental decision-making under uncertainty with the flesh-and-blood entrepreneur of history, “those who are especially eager to profi t from adjusting production to the expected changes in conditions, those who have more initiative, more venturesomeness, and a quicker eye than the crowd, the pushing and promoting pioneers of economic improvement: (Human Action, Scholars Edition, p. 255). Mises suggests the term “promoter” for the latter, lamenting the fact that economists have used the term entrepreneur for both the praxeological category and the historical ideal type.

Of course, Mises’s suggestion didn’t catch on, and most commentators continue to confuse the two, and also to identify entrepreneurship exclusively with new companies (what Foss and I call the “startup bias” of entrepreneurship literature). A good example is today’s (funny) Dilbert, highlighting the fact that new business ventures often fail and that firm founders work a lot of hours and aren’t always nice guys (ahem).

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To honor Julia Child on her 100th birthday, Lynne Kiesling writes a nice post combining three of my favorite things: cooking, entrepreneurship theory, and Austrian economics. Good cooking is about the combination of heterogeneous resources, it requires experimentation and creativity, and it either works or it doesn’t. Most important:

A system that will yield the most valuable and pleasing combinations of entrepreneurial economic or cooking activities will have low entry barriers (anyone can try to cook!) and a robust feedback-based system of error correction. Low entry barriers facilitate creativity in discovering new useful products from the raw elements, as well as enabling new value creation when some of those raw elements change. Error correction, whether a “yuck, that’s gross!” at home or a lack of profits due to low repeat business at a restaurant, is most effective and valuable when there are feedback loops that can inform the cook-producer about the value that the consumer did or did not get from the dish.

This emphasis on error correction highlights one of my differences with Kirzner’s approach to entrepreneurship. In Kirzner’s system, which emphasizes entrepreneurship as a coordinating agency, the entrepreneur is modeled as “piercing the fog” of uncertainty — hence the familiar metaphor of entrepreneurship as the discovery of preexisting profit opportunities. My approach focuses on action, not discovery, and gives a larger role to uncertainty. What generates coordination, in this approach, is the entrepreneurial selection process, not the “correctness” of entrepreneurial decisions.

Incidentally, Saras Sarasvathy often uses cooking to illustrate her “effectual” approach to entrepreneurial decision-making (i.e., cooks don’t always follow a recipe to produce a known dish, but use the ingredients they have in a sequential, experimental process). And for more on food, see here and here.